25th Congress, [ SENATE. ] [106 

2d- Session. m r\ a r r * ( T i » 

I iAvV O^vct o-V India.* aftdofS, 



REPORT 

FROM 

THE SECRETARY OF WAR, 

IN COMPLIANCE 

With a resolution of the Senate of the \0th instant, in relation to the 
payment of Indian annuities in goods, fyc. 



January 17, 1838. 

Read, and ordered to be printed. 



War Department, 

January 16, 1838. 
Sir : 1 have the honor to transmit a report from the Commissioner of In- 
dian Affairs, in answer to the resolution of the Senate, of the 10th inst., re- 
quiring information respecting the payment of Indian annuities in goods, 
during the past year. 

Yery respectfully, 

Your most obedient servant, 

J. R. POINSETT. 

Hon. R. M. Johnson, 

President of the Senate. 



War Department, 
Office Indian Affairs, January 16, 1838. 

Sir : In obedience to your direction. I have the honor to report on the 
resolution of the Senate of the 10th inst., calling for information respecting 
the payment of Indian annuities in goods, during the past year. 

The accompanying tabular statement shows the names of the tribes, the 
aggregate amount of the annuities of each, the amount offered in goods, 
and the tribes by which it was accepted in goods. The copies of the in- 
structions to the acting superintendent of Indian affairs, and the principal 
military disbursing agent in Michigan, herewith transmitted, exhibit the 
reasons for the measures adopted, and the mode in which the arrangements 
were made and designed to be executed, for carrying them into effect. It 
will be perceived that it was to be left to the Indians themselves to deter- 
mine whether they would receive the goods tendered to them. If they ex- 
pressed their willingness to do so, the payment of their annuities, or any 
part of them, in that mode was fully authorized by the provision in the 1 2th 
Blair & Rives, printers; 



[ 106 ] 



2 . 'litlS 



section of the act of June 30th, 1834, organizing the Department of Indian 
Affairs. If they refused to accept them, there would have been no depar- 
ture either from that provision or the stipulations in the treaties ; the only 
consequence would have been delay until the Government should be able 
to make other arrangements for the payment of the balance. It is not known 
or believed that the instructions upon this point were disregarded. 

The merchandise was purchased in New York, of Suydam, Jackson. 
& Co., upon a contract framed in strict conformity with the terms of the 
13th section of the act just referred to. The payments upon the contract 
were made as follows : 

By drafts on banks in New York - - - §41.254 94 

By drafts on banks in Detroit - 53.978 00 

By drafts on receivers of the land offices at Ionia and 

Bronson. Michigan - 51,714 00 

According to the understanding of the parties to the contract, at the date 
of its inception, all the payments were to be made in current funds in New 
York. But when the requisitions for the last two sums were issued, on the 
23d of August, the Treasury Department was unable to give warrants on 
banks at that place ; and it proposed, therefore, to give, in lieu thereof, the 
drafts on Detroit, and the receivers, as above stated. 

Very respectfully. 

Your most obedient servant, 

C. A. HARRIS, 

Commissioner. 

Hon. J. R. Poinsett, 

Secretary of War. 

P. S. — A copy of he letter to the acting superintendent of the western 
superintendency. of June 23d, on the subject of the payment of the an un- 
ties to 1 e tribes in his superintendency, is transmitted, as explanatc rH 
the different views entertained in regard to them, founded on the inpr- fe- 
ment of the largest among them. 

C. A. H, 



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C 106] 



Extract of a letter to H. R. Schooler aft, from the Commissioner of Indian 
Affairs, dated 23d June, 1837. 

The condition of the monetary concerns of the country has rendered it 
impossible to pay the whole amount of the annuities, to the several Indian 
tribes in your superintendency, in specie. Arrangements have, therefore, 
been made for delivering a proportion in specie, and the residue in goods. 
This proportion, excluding fractions, will be one-half. The causes of the 
existing embarrassments are doubtless well understood by you, and you 
will please to give ample instructions to the several agents and sub-agents, 
that they may give the requisite explanations to the Indians. Whether the 
latter will receive these goods, must be determined by themselves. If, after 
; examining them, understanding the manner in which they have been 
selected, and the motives for making the payments in this mode, they shall 
manifest a reluctance to receive them, they must not be urged to do so, 
but in that event they must wait for the balance of the annuities, until it is 
convenient for the Government to pay them in specie. I am well aware 
how difficult it will be to convey to the Indians a correct notion of the 
necessity of the present measure. And I am also aware how probable it 
is that the effect of the efforts and representations of the agents and officers 
, of the Government, will be counteracted by those to whom the Indians 
i have become indebted, and who have looked to the annuities as a fund from 
which they would eventually be reimbursed. But my convictions are 
equally clear and decided, that a payment in goods is not only the nearest 
. approximation to a payment in specie, practicable at this juncture, but that 
it would be much more advantageous to the Indians, if the whole amount 
of their annuities were paid to them each year in the same manner. In 
these impressions, I am fortified by the concurrence of the Secretary of 
War. I am authorized, therefore, to instruct you to make these views clearly 
S known to the Indians. It seems to me obvious, that it will be far better for 
| them to receive clothing, household implements, and supplies for their 
I hunting excursions, which will be equal to their wants in these respects 
I for the entire year, than to receive their annuities in either of the usual 
' modes. You can learn from Mr. C. Bush, of New York, who has had some 
I agency in purchasing these goods, in what manner and with what care 
! they have been selected, and this you can cause to be made known to the 
; Indians. Let them understand, also, that, purchased of the original importer 
j' in large quantities and amounts, they cost less than they have been accus- 
touted to pay to their traders for the same articles ; and let them have ample 
: opportunities to test the qualities of the two supplies by comparisons. 
When these explanations are made, the Indians should be left to form their 
judgments, unbiassed by the traders. And if any effort is observed, on the 
; part of the latter, to persuade the former not to conform to the views of the 
| Government, their licenses will be instantly revoked, and the reasons for 
i the measure communicated to this office. It should be borne in mind, that 
j' the Government is not only under no obligation to secure the payment, out 
; of the annuities of debts of Indians, to traders, but is absolutely without 
!■' authority of law to do so. The traders have ail along been aware of this, 
| and in permitting and encouraging the Indians to contract debts, they have 
acted with a clear perception of the many hazards of reimbursement they 
j incurred. The first duties of the Government, in this matter, are to itself 
j and the Indians ; and when prevented by circumstances, such as at present 



[ 106 ] 



6 



exist, from a liberal execution of treaties, they must adopt the next best 
course for the Indians, although it may delay or defeat the satisfaction of 
claims of their creditors. That the next best course has been adopted is 
most evident, as the only remaining alternative, and the only one that 
has been suggested by some of the principal traders, is a payment in bank 
bills. 



[extract.] 

War Department, 
Office Indian Affairs, June 23, 1837. 

Sir : In consequence of derangement in the financial operations of the 
country, it has been found impracticable to procure specie for the whole 
amount of the annuities payable to the Indians the present year. The ar- 
rangements of the Treasury permit the payment of about one-half the 
amount due to each tribe. 

The balance of the annuities, it has been determined, after much consid- 
eration, to offer to the Indians in goods. For a large majority of them 
bank notes are of course out of the question, and goods, purchased in large 
quantities directly of the importers, furnish the nearest equivalent to specie 
that can be procured. I have written to Mr. Schoolcraft on this subject, 
and requested him to give the agents and sub agents such instructions as 
will enable them to make the necessary explanations to the Indians. A 
similar letter will be addressed to Governor Dodge, and similar instructions 
given to Colonel Pepper, Mr. Kercheval, Colonel McElvain, and Mr. Stry- 
ker. Copies of these papers and of letters to Mr. C. Bush, Colonel Symington. 
Mr. Conner, and to the contractors for the goods, Messrs. Suydam, Jackson, 
& Co., of New York, will be enclosed to you, and will put you in possession 
of the views of the Government, which you are requested to communicate 
to the military officers whom you may call upon to assist you in paying 
the annuities, and also to take the several measures therein devolved on you. 
Of course, it will be your duty to cause the goods to be transported from the 
places of delivery to those of the payments of the annuities. The goods 
and money for these should be paid at the same time. 

It is a part of the arrangement, that when Mr. Bush shall have satisfied 
himself of the identity of the goods delivered with those purchased, he shall 
endorse on a copy of the invoice, which will be in the possession of the 
contractors, a certificate to that effect, and the person who receives them a 
receipt ; upon this certificate and receipt, payment will be made to the con- 
tractors. 

The same course will be taken in regard to the Logansport delivery, by 
Col. Symington. 

It is a stipulation in the contract, that the goods shall be examined to as- 
certain the amount of damage, if any, occurring in transitu, and that if 
any be discovered, the amount shall be appraised by disinterested persons, 
one to be chosen by each party, and the amount of the award deducted 
from the amount of the invoice. You will, of course, have this attended to. 

A warrant will be issued in your favor, for $102,786, on account of an- 
nuities, being about one-half of the whole amount due, the other half being 



7 



[ 106 J 



in goods, for which the Treasury Department, will give tfye following 
drafts : 

1. One on the receiver at Milwaukee, for the Me- 

nomonee annuity - $13,000 

2. One on the same for Six Nations, at Green 

Bay 195 

13,195 

3. One on the receiver at Lima, Ohio, for Wyan- 

dots - 2,950 

4. One on the same for Munsees, Delawares, and 

Wyandots - 500 

— 3,450 

5. One on the receiver at Chicago, for Ottowas, 

Chippewas, and Pottawatamies - - 16,350 

6. One on the receiver at Fort Wayne, for Pot- 

tawatamies, - 27,035 

7. One on the same for Miamies - - 13 3 050 

40.085 

8. One on the banks in Detroit, for Ottowas and 

Chippewas - 21,150 

9. One on the same for Christian Indians - 400 
10. One on the same for Six Nations, New York 2,056 
] 1. One on the same for Senecas, New York - 3,000 

12. One on the same for Ottowas, at Maumee - 1,700 

13. One on the same for Chippewas - - 1,400 

_ 29,706 



$102,786 

If the banks refuse to give specie for the $21, 150 due to the Indians of 
the Mackinac agency, the receiver at Milwaukee has been instructed by 
the Secretary of the Treasury to take up the draft, and supply the specie; 
To the receiver at Detroit, similar instructions have been given, in. lespect 
to the other drafts on banks m that city, as above noted, in the event of a 
refusal to pay in specie. The drafts Nos. 1 to 7, inclusive, being on receiv- 
ers, will doubtless produce the specie. 

k second warrant will be issued for $21,225, on account of treaty stipu- 
lations ; for this the Treasury will give the following drafts, viz : 



36 of $500 each . = $13,000 

1 of $255 - - - 255 

7 of $200 eadi ------ 1,400 

IGoffLOOeaoh ------ 1 ; 600 



$21,255 



A third warrant will be issued for $5,000 for which the following drafts 
will be given, viz : 
6 of $500 each : - $3,000 

5 of $200 each - 1,000 
10 of $100 each ------ 1,000 



$5,000 



[ 106 J 



S 



Enclosed, I transmit ten copies of the Treasury circular, dakd the 17th 
of May, from which you will perceive that these drafts are receivable in 
payment for lands and custom house bonds, if not paid by the banks on 
which drawn, when certain conditions are complied with. I presume you 
can readily obtain upon them such funds as will enable you to meet all 
the engagements of the Government, in a manner satisfactory to its credi- 
tors. The whole arrangement has been so guardedly framed, that I think 
you cannot possibly be disappointed in procuring the whole amount ot 
specie, and other suitable funds required. 

Maj. John Garland. 



War Department, 
Office of Indian Affairs, June 23, 1837. 

Sir : The annuities for the tribes, not within your superintendence- due 
the present year, will be paid, one-half in goods, the other in specie. The 
reasons for this course, growing out of the state of the currency, will readily 
present themselves to you. It has been adopted, however, with the less 
reluctance, from a well settled conviction that it will be in every respect 
most advantageous for the Indians. Indeed, I am strongly persuaded 
that, in the cases of almost every tribe, it will be most conducive to the 
welfare of the Indians, to receive the whole amount of their annuities each 
year in goods. There may be peculiar circumstances in the condition of 
some of the tribes, particularly the larger ones, in your superintendency, to 
render a payment in specie or bills better for them. I wish you would 
give these a careful consideration, in such manner as you may think best, 
and then represent to the Indians, when assembled to receive their annui- 
ties, and before they determine how those for the next year shall be paid, 
the firm belief of the Government that goods purchased at the place of im- 
portation, in large quantities, and consequently at comparatively cheap 
rates, will be far more useful and profitable to them than money ; and you 
will use your official influence to impress these views, and procure their 
concurrence in them. 

For the Choctaws, this duty will be performed by yourself; for the 
other tribes, by the proper agents and sub-agents under your instructions. 

Yery respectfully, &c, 

Capt. Wm. Armstrong, 

Choctaw Agency, Arkansas, 



74 539 




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